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1. Bringing support schemes
in line with EU law
The German experience
18-03-09 Referent 1
Sonja Röder, LL.M.
Federal Ministry for Economic Affairs and Energy
Division “General Aspects of Energy Law, Renewable Energy Sources Act”

2. Continuously developed policies have fostered
the deployment of renewables
3/9/2018 | 2
Source:Ecofys2016basedonAGEEStat2016
0
10
20
30
40
0
50
100
150
200
250
1990
1991
1995
2000
2005
2010
2014
2015
2017
2020
hydro
biomass
wind onshore
solar PV
wind offshore
2020 target
[right axis]
ShareofRESingrosselectricity
consumption
Grosselectricitygenerationfrom
renewablesinTWh
PV programme
“1.000 Roofs”
EEG EEG
Amendment
Electricity Feed-In Law Energy
Concept
EEG
Amendment
Share of RES
[right axis]

3. Cornerstones of the Renewable Energy
Sources Act (EEG)
3/9/2018 | 3
• Guaranteed grid access; priority transmission and distribution
• Fixed price (tariff or premium) for every kWh produced, granted for 20 years
• Price is set for each type of technology and with regard to further provisions
(e.g. site and size)
• Additional costs for renewable energy production are offset through the EEG
surcharge (2016: ~ 6,35 ct/kWh; 2017: ~ 6,88 ct/kWh; 2018: ~ 6,79 ct/kWh),
paid by suppliers
• Additional costs are offset via grid operators and independent of the public
budget, as they are funded by all electricity consumers, with reductions for
energy-intensive industries
• Regular monitoring and evaluation; accompanying research

4. Legal certainty: Bringing the EEG in line with
EU law
3/9/2018 | 4
 GER notified non-aid measure for legal certainty
 EU COM considers state aid and assessed on the basis of EEAG
 Approval regarding the compliance of the EEG 2014 and 2017
with state aid provisions
 Exemptions for energy intensive industries
 From FiT to FiP
 Auctions
 Legal framework for RES support is set for the next years

5. Special Equalization Scheme ensures
competitiveness of energy intensive industries
3/9/2018 | 5
• Electricity intensity:
Companies that work in
electricity-intensive sectors
• International trade:
additional sectors prone to
international competition
Eligibility criteria Contribution
• Minimum contribution:
full EEG surcharge for the
first GWh
• Additional contribution:
15% of the EEG surcharge
for every kWh beyond, cap at
0,5 % / 4% of gross value
added
Source:

6. EEG 2014: FiP becomes the rule
Speaker
18-03-09 6
• All electricity from RES installed after August 2014 has to be traded (FiP)
• Small operators can still use FiT

7. FixedFeed-in-Tariff
Market
premium
Premium system increases market integration
of renewables
Profit
Risk
€
3/9/2018 | 7
RemunerationunderEEG2017
Feed-in Tariff Feed-in Premium
Participants bid on the
reference value
Auctions
Reference value is defined administratively
Support payments
Market revenues
Monthly
average
market
revenues
Market
premium
Low
market
price
Market
premium
High
market
price
Monthly
average
market
revenues
Market
premium
Source:Ecofys2017

8. EEG 2017: introducing auctions
Switching the RES support scheme
from administratively determined
prices to prices set by competitive
auctions

9. EEG 2017: introducing auctions
3/9/2018 | 9
Source:Ecofys2016basedonEEG2017
Cost
efficiency
Stakeholder
Diversity
Quantity
control
Guiding principles Auctions for all major
renewable technologies

10. Deployment corridor EEG 2014 / EEG 2017
Overall target corridor:
RES share in gross
electricity consumption
• In 2025: between 40%
and 45%
• In 2035: between 55%
and 60%
Capacity additions
• PV 2.5 GW per year (600 MW in auctions),
• Wind onshore 2,8 GW (2,9 GW from 2020)
• Offshore wind 15 GW by 2030
• Bioenergy 150 MW (later 200 MW) per year

11. Specific capacity addition targets make
deployment of renewables more plannable
3/9/2018 | 11
Source:EcofysbasedonBMWi2016andEEG2017
0 2000 4000 6000
2026-2030
2023-2025
2020-2022
2017-2019
onshore wind
(auction)
offshore wind*
(auction)
solar PV
(auction)
solar PV
(other**)
biomass
(auction)
**EEG 2017 defines 2500 MW of yearly brutto capacity additions. 600 MW are allocated via auctions, 1900 MW via administrative FIT/FIP
*500 MW to be added annually in 2021 and 2022 (not in 2020)
Annual capacity addition targets per technology in MW

12. Auctions: eligible technologies
 Auctions started in 2017 for
 Wind onshore
 Wind offshore
 Photovoltaic (pilot auctions for ground mounted PV installations were already
conducted before 2017)
 Biomass
 Installations < 750 kW (biomass: < 150 kW ) are exempted.
 Thereby, 80% of new RES deployment are covered.

13. Tendering scheme in general
Technology specific, but common features:
• Tendering of total amount of installed capacity (MW);
1-4 auction rounds per year conducted by Federal Network Agency
• Only price is decisive for awarding support
• Bids will be accepted, starting with the lowest until the amount of
capacity that is being auctioned is reached. In principle, the amount
of funding corresponds to the individual bid (pay as bid)

14. PV: Significant reduction in support costs since the
introduction of auctions in 2015
3/9/2018 | 14
Source:BMWi2017basedonBNetzA
Values correspond to the average award values

15. Onshore wind: The first auctions have shown
declining average reward values
3/9/2018 | 15
• Auctioned volumes were
clearly exceeded
• Round 1: 2.137 MW offered
v. 800 MW auctioned
• Round 2: 2.927 MW offered
v. 1000 MW auctioned
• At least 90% of awarded bids
came from citizens’ energy
cooperatives
Source:BMWi2017basedonBNetzA

16. Thank you for your attention!
18-03-09 Referent 16
Sonja Röder, LL.M.
Federal Ministry for Economic Affairs and Energy
Division “General Aspects of Energy Law, Renewable Energy Sources Act”

17. Tendering scheme for onshore wind
• In 2017, 2018 and 2019, 2,800 MW and from 2020, 2,900
MW (gross) will be auctioned each year, in 3 rounds (1st of
May, 1st of August, 1st of November)
• Prequalification: Approval pursuant to Federal Immission
Control Act (final administrative decision)
• Bid bond: 30 €/kW or bank guarantee to discourage non-
realisation
• Realisation period: 30 months

18. Tendering scheme for photovoltaics
 PV installations > 750 kW; eligible are:
 Ground-mounted installations
 Installations on buildings and on other constructial facilities (e.g. waste disposal sites)
 600 MW will be auctioned each year, in 3 rounds (1st of February, 1st of
June, 1st of October)
 Prequalification: admission by local authorities and/or area development
plan (early planning stage)
 Bid bond: 50 €/kW to discourage non-realisation
 Realisation period: 24 months

19. Tendering scheme for biomass
 Existing installations (including those < 150 kW) can take part in the auctions
in order to receive 10-year follow-up funding, provided that they generate
electricity in a flexible and demand-based manner.
 New installations < 150 kW receive statutory feed-in tariff
 Bid bond: 60 €/kW; Realisation period: 24 months
 Maximum price for new installations: 14,88 ct/kWh;
Maximum price for existing installations: 16,9 ct/kWh
 Prequalification: Approval
 Flexibility Obligation: Biogas plants will only be granted funding for half of the
hours of a year. This is to encourage these plants to generate electricity at
times when the wholesale price is high as little wind and sun is available and
demand is high.
19

20. Tendering scheme for offshore wind
The central ‘Danish’ target model will be introduced for offshore wind as of 2026:
o Area Development Plan 2019 is the focal planning instrument and will replace
Offshore Grid Development Plan and Spatial Offshore Grid Plan as of 2026
o Government examines in advance the sites to be auctioned for wind farms. This
ensures optimal dovetailing with the grid connections.
o In every other model, a stock of grid connections would have to be built. Otherwise
there would be no competition. This would entail massive extra costs.
o First auction according to the central model: 1. Sept. 2021; bid bond: 200 €/kW
Transition phase 2021 to 2025; Deadlines April 2018/2019; 3.100 MW in total for advanced
projects
o Synchronisation with grid expansion: 500 MW in the Baltic Sea by 2021, 500 MW
Baltic Sea/North Sea by 2022, 2023-2025: 700 MW per year;
Start with market premium (Federal Network Agency)
o Maximum price: 10 ct/kWh; Bid bond: 100 €/kW; Bids on „minimum volume“ and
„underpinning bids“ are possible
o Not awarded bidders have the “right for admittance” to the central model from 2026
in case of surrender of data
20

21. 21
 The EEG 2014 offshore aims are still valid: until 2030, an offshore
capacity of 15.000 MW shall be installed
 Transition period (2021 – 2015):
 In 2021 and 2022, additional capacity of 500 MW per year and in 2023 – 2025 of
700 MW per year is planned
 Offshore wind farms that are already planned may take part in the auctions
 In 2021, only wind farms in the Baltic Sea are eligible for the auction
 Central model (from 2016 onwards):
 From 2026 onwards the deployment increases to 840 MW per year. They will be
auctioned in the so-called „Danish model“: The state investigates possible sites
before the auction and ensures an optimal linkage to grid connection.
Auctions for wind offshore

22. 22
 Until sufficient transmission system capacities are available, we take
three measures to reduce redispatch costs:
1. To reduce curtailments an instrument for power-to-heat is introduced as „optional
load“
2. Limitation of deployment for wind onshore in areas with grid bottlenecks
 A so-called „grid expansion area“ is determined since 1st March 2017
 In this area deployment for wind onshore is limited to 58 per cent of the average
deployment in the years 2013 – 2015
3. Steering offshore deployment
 2021: 500 MW in the Baltic Sea; 2022: 500 MW in North and Baltic Sea
 2023 – 2025: 700 MW per year and from 2026 onwards 840 MW per year in North and
Baltic Sea
Linkage to grid expansion

23. 23
 Aim: To maintain a high degree of stakeholder diversity.
 This aim is reached by e.g.:
 The de minimis threshold of 750 kW – thereby inter alia small and middle-sized PV
installations are exempted from the auction scheme.
 The simple and transparent design of the auction scheme.
 The Federal Government will also initiate special consultancy and
support offers for small stakeholders.
 Furthermore, auction requirements for wind onshore are lowered for
local so-called „citizens‘ energy communities “.
Stakeholder diversity

24. 24
 Definition of a citizens‘ energy projects:
 Companies, which consist of at least 10 private persons and where these private
persons (located on site) have the majority of voting rights.
 No shareholder has more than 10 per cent of the voting rights.
 Maximum project size of 6 installations with an electrical capacity of no more than
18 MW.
 Municipalities have the chance to invest up to 10 per cent in the project.
Stakeholder diversity (2/3)

25. 25
 Easier conditions of participation, so that these projects do not have to
pre-finance high costs:
 No permit according to the Federal Immission Control Act (BImSchG) is required,
when a bid is submitted. It is sufficient to document that the site is reserved and to
present a certified wind report.
 Half of the usual security deposit needs to be paid only after the BImSchG permit
 Extension of the realisation dead line to max. two years.
 Furthermore, the support rate for citizens‘ energy projects is not
determined by the value of its bid, but by the value of the highest bid
that was accepted. Thus, they are privileged financially.
Stakeholder diversity (3/3)

26. Technology-specific payments reflect the varying
cost of different types and sizes of renewables
3/9/2018 | 26
2,95
3,69
5,73
25
3,9
4,42
8,84
0 5 10 15 20 25 30
hydropower
landfill, sewage & mine gas
biomass
geothermal
wind offshore
wind onshore
solar PV
Set support levels (based on degression) July 2017 in € cent/kWh
12.6
7.95
19.4
23.26
8.17
12.4
Source:Ecofys2016basedonBNetzA2016
Average award level at the solar PV auction in June 2017
was 5.66 €cent/kWh

27. vv Requirements
Cooperation
agreement
Reciprocity
Physical
import effect
• 50 MW of solar projects
in Denmark
• Projects to be built at
5.38 € cent/kWh
Open auction
with Denmark
Auctions will be open to pan-European competition
for 5% of newly installed capacity each year
3/9/2018 | 27
Source:

28. Cooperation pilot with Denmark
• Cooperation agreement for mutually opened auctions for
ground mounted PV installations signed in July 2016
• First cooperation of its kind
• German and Danish opened auctions conducted in 4th quarter
of 2017
• Volume of German auction: 50 MW, fully opened for
installations in Denmark
• Volume of Danish auction: 20 MW, of which 2.4 MW
were opened for installations in Germany

29. Results of the German opened pilot auction with
Denmark
xyz
Bidding
deadline
23.11.16
Tendered
volume
50
Bids (volume) 297 MW
Successful bids
(awarded
volume)
5 bids with 10 MW each,
all successful projects
located in Denmark
Ø reference
value ct/kWh
5,38